LONDON: Copper prices pulled back on Wednesday from a two-year peak after disappointing US payrolls numbers raised doubts about economic recovery and as the dollar firmed.
Copper went into negative territory after data showed US private employers hired fewer workers than expected for a second straight month in August, suggesting that the labour market recovery was slowing. Gains of 428,000 jobs were less than half what economists had forecasted.
The dollar extended overnight gains and the euro fell, making greenback-traded metals more expensive for buyers using other currencies.
"The failure of the dollar to weaken further yesterday after it hit 1.20 against the euro, that's just helped take some of the sting out of the rally," said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen.
Three-month copper on the London Metal Exchange was down 0.01% at $6,686.50 a tonne by 1615 GMT after hitting its highest since June 2018 on Tuesday.
Copper would have to remain above the $6,600 level to keep its bullish stance intact, Hansen added.
The metals market was also hit by speculators locking in profits from its recent rally.
"Today is all about liquidation and profit-taking," said a Singapore-based metals trader.
Peru's vice minister of energy and mines said that mining had almost completely recovered from the impact of the Covid-19 pandemic.
Fitch Solutions raised its 2020 average price forecast for LME three-month nickel to $13,500 a tonne from $13,250.
The discount of cash LME nickel to the three month contract has fallen to $20 a tonne, the lowest since mid November last year.
LME nickel was set for an eighth straight session of gains, rising 0.8% to $15,665 a tonne.
LME aluminium shed 1.5% to $1,789.50 a tonne, zinc gave up 0.9% to $2,530.50, lead fell 1.7% to $1,938.50 while tin gained 0.9% to $18,350, the highest since July 2019.
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